IMF puts total cost of crisis at £7.1 trillion

The cost of mopping up after the world financial crisis has come to $11.9
trillion (£7.12 trillion) ? enough to finance a £1,779 handout
for every man, woman and child on the planet.

By Edmund Conway

10:01PM BST 08 Aug 2009

The staggering total is is equivalent to around a fifth of the entire globe's annual economic output and includes capital injections pumped into banks in order to prevent them from collapse, the cost of soaking up so-called toxic assets, guarantees over debt and liquidity support from central banks. Although much of the total may never be called on, the potential outlay still dwarfs any previous repair bill for the global economy.

The IMF calculations, produced ahead of the two-year anniversary of the crisis, underline the continually mounting cost. Most of the cash has been handed over by developed countries, for whom the bill has been $10.2 trillion, while developing countries have spent only $1.7 trillion ? the majority of which is in central bank liquidity support for their stuttering financial sectors.

The IMF figures also show that Britain has been the biggest of all the spenders on emergency measures to support its financial sector, with its total bill for the clean-up amounting to 81.8pc of its gross domestic product ? equivalent to £1,227bn.

Britain's record bill is also unique in that it has also already spent much of it already, with 20pc of GDP having already supported struggling institutions.